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Vitacost.com, Inc. Announces Preliminary Settlement Of Derivative Lawsuit

Stocks in this article: VITC

Vitacost.com, Inc. (NASDAQ: VITC), a leading online retailer and direct marketer of health and wellness products, announced today that the Circuit Court of the Fifteenth Judicial District, Palm Beach County, Florida (Hon. Thomas H. Barkdull, III) issued an order preliminarily approving the settlement of the derivative lawsuit as set forth in the Stipulation and Agreement of Settlement dated April 19, 2011. The Court’s order provided that the notice set forth below, summarizing the matter and the settlement, be issued.

About Vitacost.com, Inc.

Vitacost.com, Inc. (NASDAQ: VITC) is a leading online retailer and direct marketer of health and wellness products, including dietary supplements such as vitamins, minerals, herbs or other botanicals, amino acids and metabolites, as well as cosmetics, organic body and personal care products, sports nutrition and health foods. Vitacost.com, Inc. sells these products directly to consumers through its website, www.vitacost.com, as well as through its catalogs. Vitacost.com, Inc. strives to offer its customers the broadest product selection of healthy living products, while providing superior customer service and timely and accurate delivery.

CIRCUIT COURT OF THE FIFTEENTH JUDICIAL DISTRICT

PALM BEACH COUNTY, FLORIDA

JOSEPH KLOSS, derivatively on behalf of VITACOST.COM, INC.,

 

 

CASE NO.: 502010CA018594XXXXMB

CIVIL DIVISION: AO

 

Plaintiff,

SUMMARY NOTICE OF STIPULATION AND AGREEMENT OF SETTLEMENT

 

vs.

 

IRA P. KERKER, RICHARD P. SMITH, STEWART GITLER, ALLEN S. JOSEPHS, DAVID N. ILFELD, LAWRENCE A. PABST, ERAN EZRA and ROBERT G. TRAPP,

 

Defendants,

 

and

 

VITACOST.COM, INC.,

 

Nominal Defendant.

/

 
 

TO:

ALL CURRENT RECORD HOLDERS AND BENEFICIAL OWNERS OF VITACOST.COM, INC. (“VITACOST” OR THE “COMPANY”) COMMON STOCK.

 
IF YOU ARE A CURRENT OWNER OF VITACOST COMMON STOCK AND YOU CONTINUE TO HOLD THOSE SHARES AS OF THE DATE OF THE SETTLEMENT HEARING, YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS ACTION. THE ACTION IS NOT A “CLASS ACTION.” THUS, THERE IS NO “COMMON FUND” UPON WHICH YOU CAN MAKE A CLAIM FOR A MONETARY PAYMENT.
 

PLEASE TAKE NOTICE that the above-captioned stockholder derivative action (“Action”) pending in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida (the “Court”), is being settled on the terms set forth in a Stipulation and Agreement of Settlement dated April 19, 2011 (the “Stipulation”). This Notice should be read in conjunction with, and is qualified in its entirety by reference to, the text of the Stipulation (and its exhibits), and the “complete” Notice, both of which are on file with the Court, and on Vitacost’s website at http://investor.vitacost.com. A copy of the complete Notice may have also been mailed to you. For the full details of the Action, the claims and defenses which have been asserted by the parties and the terms and conditions of the Settlement, including a complete copy of the Stipulation, you are referred to the Court files in the Action. You or your attorney may examine the Court files during regular business hours of each business day at the Office of the Clerk of the Court, Circuit Court of the Fifteenth Judicial Circuit, 205 N. Dixie Highway, West Palm Beach, Florida 33401. All capitalized terms herein have the same meanings as set forth in the Stipulation.

Generally, the Plaintiff in the Action and another stockholder who wrote a letter (the “Demand Shareholder”) to the Company’s board of directors (the “Board”) claimed that Defendants breached their fiduciary duties in connection with their management and oversight of the Company. Generally, the Plaintiff and the Demand Shareholder claimed that Defendants: (1) caused, or allowed the Company to issue a series of materially false and misleading statements in connection with and after the Company’s IPO; and (2) failed to observe certain technical corporate formalities under Delaware law which had the effect of causing potential defects with respect to the: (a) organization of the Company; (b) election of directors to the Company’s Board; and (c) the issuance of stock and stock options.

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